Fantastic House Buyers: Shutting Down My PropTech Business

Fantastic House Buyers was an online service designed to improve the expensive and stressful experience of buying a house in the UK. Alan built it himself and start trying a lot of different marketing strategies. However, after a few months, he realized he had built something that no-one wanted.

United Kingdom

PropTech

No MVP Validation

Alan Murray

May 20, 2018

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Hi Alan! What's your background, and what are you currently working on?

Hi, I’m Alan from the UK and my background is in business analysis, mainly for global organizations. Last year I decided to give this up and launch my own start-up which ultimately failed and I’m currently in the process of validating my next startup Flow Metrics. This came from wanting to reduce the amount of time I was spending finding and extracting information from Google Analytics during my failed startup Fantastic House Buyers, which I’m delighted to be able to talk to you about today!

Fantastic House Buyers was an online service designed to improve the expensive and stressful experience of buying a house here in the UK. The premise was simple: a digital assistant that helped house buyers through the process and provided everything they needed in one place, including recommendations of professionals they would need during the process.

I was the sole founder and employee on this and financed it myself. The business model was to take commission from recommending professional services and it seemed like a no-brainer with low operating costs and high potential revenue per user meant I only needed a small number of users to make it profitable.

In hindsight, I committed a rookie mistake that led to its failure before it generated any revenue, one that should have been apparent and solvable from that start but took me a while to realize.

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What motivated you to start Fantastic House Buyers?

I’d always had the idea that I’d like to try running my own business, though I’d never really thought about exactly what this meant or what kind of business.

Over the last couple of years, I’d started to become disillusioned with the corporate/business world that I’d been working in for the last 15 years. Last summer I decided this wasn’t a long-term option for me so I quit my job and took the plunge to launch my own startup business.

Having recently been through the process of buying a house I’d had the seed of an idea to build a platform that helps house buyers, I was amazed at how disjointed and difficult the process was and I guess my idea was to build a kind of LinkedIn for house buying, something that would provide the advice and guidance on what to do when buying a house, would connect you with professionals and allow you to manage everything all in one place.

A lot of the jobs I’d held were around analyzing and improving processes for organizations and I wanted to apply this to something myself so this seemed like a good opportunity to do so. On a personal level, I guess I also wanted more flexibility about how and when I worked and believed launching my own startup would offer this too.

I really had no idea about how to launch a business or what to do, however, I learned pretty quickly the importance of diving in and giving it a go! It’s important to be prepared and do your research, but at some point, you just need to get out there, make the mistakes and learn from them for the next time!

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How did you build it?

I didn’t have much money to invest in my idea, but I did have a lot of time so I decided I’d build it myself and keep the costs and risk low. I set aside 6 months where I’d cover my day to day living costs from my savings and re-assess my options after then.

While I was by no means a developer I had done bits and pieces of coding and been exposed to software development in a few of my previous jobs so my first task was to build on this and learn how to build and launch an online platform. I figured that worst case scenario I’d at least learn a new and useful skill.

I decided to stick with the Microsoft stack that I had some familiarity with, I even found that Microsoft run a program for startups that offer free software and credits for their Azure cloud service so I enrolled in this and set about building fantastic house buyers – the great thing is this meant my set-up costs were close to £0, how could I possibly fail!

I already had a rough idea of the product that I wanted to build and I immediately set out defining what the final product should be and build it. In hindsight, this was one of my fatal mistakes, instead of focusing on the problem I was solving and identifying the market for it I set about building something I thought I’d want and focused on the product rather than the problem and who would use it.

On reflection, I did spend quite a bit of time agonizing over this at the start. I ultimately decided I wouldn’t know what the product was until I’d built it and would find it hard explaining to people what it was. This really should have been a red flag and is a good lesson that I learned, if you can’t explain your product to someone and the problem it’s solving then you need to work this out before you spend any time on product development or writing code.

I’ve always been quite a technical person but had never really considered that I would be able to code something myself so I was quite proud that I managed to build the entire back end, front end and database myself in around 6 months and thought the end product was pretty good.

I did quite enjoy the challenge of working out how to solve coding and design problems and learning a new skill, however, as I was working solo I also found it a little frustrating at times not having anyone to run ideas and challenges past. This did have a positive side though in that it really taught me how to identify and focus on the important tasks and ignore the noise (something you don’t really learn to truly appreciate when working in a large organization).

I quietly launched the initial version of the site in August 2017 but I had no real idea how to market my product and get users. I ended up having some success with paid adverts on Facebook and Google but I found it really difficult to achieve much traffic organically, this was mainly because the vast majority of people visited two main property portals here in the UK that were very difficult to compete with in terms of content marketing and SEO.

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Which were your marketing strategies to grow your business?

I started out with social media and aimed to grow my followers on Twitter, Facebook, LinkedIn and Pinterest hoping this would drive traffic to my site and generate some users. This never really worked out for me though and I quickly discovered that Pinterest wasn’t really relevant to my audience. LinkedIn and Twitter were useful for connecting with people and finding contacts in the industry but drove very little relevant traffic to my site. I did try paying for some promoted posts on Twitter but I didn’t find this an effective channel.

Facebook didn’t really work organically either but I had quite a bit of success with Facebook ads. At first, the results weren’t very good but after experimenting with my adverts I started to get a bit of traction. I was getting a couple of thousand clicks a month for about £100 so I thought I’d hit a winning strategy, all I had to do was pay for more adverts and I’d get more users!

As you can imagine, this didn’t happen. Although I was getting visitors my bounce rate was high and sign-ups were very low, those that did sign up never really came back and it dawned on me that the traffic I was getting wasn’t targeted, it was people seeing an advert and having a look at what the site was but realistically most of them weren’t my target customers and I’d be unlikely to convert them.

I then moved on to trying Google Adwords as I thought this would provide more targeted traffic since people were already searching for the terms I was advertising for. I got some success this way and around 20% of visitors from this source were demonstrating an interest and around 5% were signing up, which would have given me enough revenue to keep going. I also found that my click-through rates were consistently between 5 and 10% which I thought was pretty good. My main issue here was that the cost per click was pretty high since there was a lot of competition from big established companies for the keywords I was targeting.

I did a lot of research into marketing strategies and tried most of the tried and tested methods but none of them seemed to work which was another clue that my product wasn’t solving a problem for enough people.

I tried content marketing and wrote a few blog posts and created some useful tools such as a mortgage calculator and managed to get some traffic to these, again it was mainly paid though. I found it difficult to find relevant sites to link back to mine and with a couple of big sites already dominating the keywords competing with SEO was really difficult.

I also tried reaching out to influencers and generating some press coverage but there were very few people operating in this area and I soon realized that marketing was going to be an uphill battle or require significant investment.

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Which were the causes of Fantastic House Buyers failure?

This is a tough one to answer honestly. I spent quite a bit of time reflecting on this and it was difficult to admit that my main cause of failure was building something that no-one wanted! If you read anything about starting a business you’ll quickly find that the main reason for failure is exactly this, however, it’s quite difficult to really appreciate this until you’ve made the mistake yourself.

I realized that it wasn’t going to work as the users that were signing up just weren’t interacting with the site enough and return visits were very low. This, in turn, meant I couldn’t generate any revenue, this wasn’t necessarily an issue as operating costs were low but what finally made me shut it down was one key question: Would I use my own product?

My honest answer was no, I wouldn’t - which seems a strange thing to say. I had big ideas and plans about what I wanted it to be and I certainly would have used the final product, however, the minimum product I launched just didn’t solve a pressing issue. This was my main learning, make sure your product is solving a problem and that you can identify a market for it before you commit much time or money to building it.

If I’m honest I felt disappointed when I shut the site down. I’d invested a lot of time and effort in building it and didn’t want this to go to waste so it was a tough decision to finally shut it down. I’d read so many stories about the importance of persevering so it was difficult to know whether to keep going or admit that it wasn’t going to work.

I’m happy that I made the right decision in the end and I’m now treating it as a learning exercise to take into my next venture. In fact, my next venture actually came out of a problem I identified while trying to market and grow fantastic house buyers!

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Which were your biggest mistakes and challenges you had to overcome?

Having thought about this a lot I can put the mistakes that led to the failure of fantastic house buyers down to one main thing: not validating the idea before launching, unfortunately, this is something I should have realized at the outset. A lot of challenges can be overcome but not having a market for your product can only end one way!

Having been through the start-up process I now realize how important it is to build something that is genuinely solving a significant problem for a significant amount of people. I set out to build a product that I thought I would want, and without a clear vision of the problem I was solving, and who I was solving it for, my chances of succeeding were very slim from the start.

The great thing about this experience is that all I lost was time rather than a significant amount of money, instead of seeing this as time lost I see it as a valuable learning experience to take forward to my next venture.

While marketing fantastic house buyers I spent an awful lot of time on Google Analytics, sometimes 1-2 hours a day trying to understand what my users were doing, how many were converting and where I needed to improve my marketing and sales funnel, or where I could potentially generate revenue through affiliate marketing.

I was spending so much time on this that I built a visitor analytics function into the fantastic house buyers admin (I was already utilizing user tracking so it was essentially a rough and ready front end to show me the numbers and info I needed, rather than having to dig through GA and plug it into spreadsheets).

While dissecting the failure of fantastic house buyers I realized that this was a pain point I had solved for myself and others may also want something like this so they can spend more time on their business and less time trying to gather the insight they need. This time, instead of worrying about the features and writing the code I’m fully validating the idea first.

To do this I’ve put together some rough mock-ups of what I think the product would look like and have a landing page where people can sign up, I’ll only develop this further once I’ve hit a certain number of sign-ups and know that there is enough interest in my product.

You can find the landing page hereand I’d be really interested to hear what your readers think. (Note that I’ve not even committed to a product or domain name until I’ve validated the idea!)

I also think there are a couple of secondary reasons fantastic house buyers failed, I think these could have been overcome but certainly didn’t help:

Poor choice of the market: In hindsight, the UK property market is currently being disrupted by a number of online real estate agents which are significantly undercutting traditional estate agents. These currently only account for around 5% of the market and the remaining 95% is quite conservative and skeptical of technology that could reduce their income, making it very difficult to get traction. There is also a lack of online communities and influencers, with 2 huge property portals serving most consumer needs. For my next venture, I’m very much focusing on the tech/start-up world where I think there is a much more supportive community and an inherent culture of embracing new opportunities and products.

Lack of industry experience: Again, I don’t think this an obstacle that cannot be overcome but choosing an industry I had no real knowledge or experience of for my first start-up only served to make it more challenging. While I don’t have a deep knowledge of the market for my next venture it is at least one I have experienced for myself and where I can better understand the challenges and problem I’m trying to solve from my customers point of view.

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HP

Which were your expenses? Did you achieve some revenue? In the end, how much money did you lose?

Luckily, I didn’t lose much apart from my own time and my main costs were my own living costs, I’ll count this as time well spent if it contributes to the success of a future venture!

In terms of costs, this is roughly what I spent:

Web hosting: Free – I signed up for Microsoft’s program offering free credits and software to start-up companies, this gave me £115 credits for Azure cloud service which was more than enough to host my website and database etc.

Web domains: £30. I bought 4 domains and 1 SSL certificate, one of which I renewed recently in case I wanted to continue.

Marketing: This was my main cost, I haven’t tallied up the final figures but reckon I invested maybe £250-£500 in paid advertising for both Facebook and Google Adwords.

Aside from that, I think my only other costs were for things like a new laptop and monitor (I’d always had one supplied by work previously) and some small pieces of office furniture for my home-office. I still make use of these though so I guess they weren’t necessarily a business cost.

In terms of time, I think I probably spent about 6 months full time on this in total. This includes a few months working on it in my spare time and maybe 2-3 times working on it full time after I’d quit my day job.

Unfortunately, I didn’t manage to generate any revenue from this.

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If you had to start over, what would you do differently?

This one’s easy! Put down the laptop and not write a single line of code until I’ve identified the problem I’m solving and can potentially sell my solution to someone right now!

The other thing I would say is to pick something I’m passionate about. I didn’t fully appreciate the difference between starting a business on your own and having a team of colleagues to fall back on when you work for someone else. I think finding something that doesn’t necessarily feel like work would make it easier during the tough times and make you more likely to stick to it.

I really enjoy solving problems and I have an interest in coding and design (enjoying something doesn’t necessarily make you good at it!) and I find these enjoyable so tend to focus my efforts on these. I’ve learned that it’s equally important to focus on the aspects that I’m not so good at it, like the sales and marketing side, and for my next venture will be focusing a lot more time and effort on these.

One of the things that held me back at the start was worrying about not knowing what I was doing and the fear of getting it wrong or negative feedback. I quickly learned that you can’t beat just jumping in and trying something and that’s a great way for me to learn, my mantra now is just do it! You might get it wrong or fail, but if you don’t try then you definitely will fail.

Finally, I’d be tempted to find a co-working space or office to work from at least once a week as having a change of scenery or a supportive community was something I felt I missed during this project.

Which are your favorite entrepreneurial resources?

Tool: I used Google Analytics a lot, I think it’s vital to analyze and understand your visitors so you know what to improve. Google Keyword Planner is great for finding the keywords you want to rank for in your SEO efforts, whether you’re going for paid ads or organic traffic.

Blogs: I love the Bare Metrics blog and the concise and insightful guides they have for pretty much everything, I also love the open start-up aspect. There are a number of other blogs I dip into but Neil Patel is one I come back to often for ideas on content marketing.

Design Inspiration: Product Hunt and Dribbble are excellent for finding new tools and design inspiration.

Coding Resources: The community at Stack Overflow is amazing and I used it extensively for solving coding problems, I don’t think there’s anything that you can’t solve there! I also found CSS Tricks to be a great resource for learning how to achieve a lot of my front-end design.

Where can we go to learn more?

You can find out more about my next venture flow metrics on my personal website, as I’m currently validating this idea I’d love to hear what your readers think!

You can also find me on Twitter, I’m always interested to hear from new people and especially people involved in the tech or start-up world or people running their own blog or business so feel free to get in touch!

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